LINE NEXT scores biggest Web3 investment in Asia of 2023

Crypto custodian Korea Digital Asset (KODA) has seen its custody assets exceed the $6 billion mark, equivalent to about KRW 8 trillion, according to game media outlet Kyunghyang Games.  Established in November 2020 through a collaboration between KB Bank, the blockchain venture capital firm Hashed and blockchain tech company HatchLabs, KODA provides custodial services for crypto assets. A custodial service provider refers to a third-party institution that manages virtual assets on behalf of clients. Several big banks overseas such as Goldman Sachs and Citibank provide asset custodial services. Photo by Chris Liverani on UnsplashA leading provider of crypto asset custodial services Having been offering one-stop crypto asset custodial services for companies and institutional clients since March 2021, KODA has become a notable virtual asset business operator in South Korea with it being registered with the Financial Intelligence Unit (FIU). By the end of June 2023, KODA made up nearly 80% of the local custodial service market share, per FIU data. At the time, out of the total KRW 2.9 trillion in crypto assets held by 49 local custodial service providers registered with the FIU, KRW 2.3 trillion was managed by KODA. By December 2023, KODA announced it was managing KRW 8 trillion in crypto assets, with over 200 custodial wallets and about 50 institutional clients using its services.  Bracing for the potential approval of spot bitcoin ETFs in KoreaThe demand for crypto asset custodial services is expected to rise as Korea’s ruling and opposition parties are pledging to integrate crypto assets into the traditional financial system, leading up to the general election in April. Major political parties are considering the possibility of allowing transactions of spot bitcoin ETFs and legalizing investment in crypto assets by private companies. Cho Jin-seok, CEO of KODA, said that the integration of digital assets into the traditional financial system is an unstoppable global trend that no one can resist, and that KODA will be able to serve as a key crypto infrastructure if the local financial authority approves trading spot bitcoin ETFs.  Kim Seo-joon, CEO of Hashed, stressed the significance of preparing for the potential approval of spot bitcoin ETF transactions, noting how a number of spot bitcoin ETFs were released in the U.S. right after the approval. He added that KODA’s commitment to regulatory compliance and technological expertise would make it an essential partner in introducing virtual asset ETFs to the local market.

Crypto.com Plans to Launch Its Services in South Korea This YearIn an interview with local news outlet Global Economic, Patrick Yoon, General Manager Korea of Crypto.com, shared the global cryptocurrency exchange’s plans to launch its services in South Korea this year. Yoon, who previously held positions at Standard Chartered Bank and Visa, joined Crypto.com in September 2021.Expansion into KoreaAccording to Yoon, Crypto.com is actively preparing to meet the requirements for obtaining a real-name account from a Korean commercial bank. In Korea, virtual asset trading platforms are legally obliged to secure such a bank account in order to support the trading of the nation’s fiat currency, the Korean won. The exchange secured virtual asset service provider registration in South Korea last year through the acquisition of Korea-based virtual asset exchange OK-BIT.Photo by Anna Evlanova on UnsplashCollaboration with Korean ent industryDuring the interview, Yoon emphasized the growing global popularity of Korean entertainment content, including drama and music. He mentioned that Crypto.com is engaging in discussions with various Korean intellectual property holders and entertainment studios to explore innovative ways to introduce Korean culture and art to international crypto audiences. Notable collaborators include entertainment company Fantagio, K-pop girl group Mamamoo, content studio Astory, and production house Studio Dragon.Crypto.com’s global presenceFounded in 2016, Crypto.com has garnered an impressive user base of 80 million worldwide. The crypto exchange has been actively obtaining regulatory approvals in many countries, including France, the United Kingdom, Dubai, Australia, Italy, Greece, and the Cayman Islands.Recent developmentsCrypto.com also recently obtained a virtual asset service provider registration from the Bank of Spain, the central bank of Spain. Prior to this accomplishment, the company received a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS), the central bank of Singapore. While Crypto.com continues to make progress in various jurisdictions, it made the strategic decision to discontinue its institutional offering in the United States due to limited demand in that particular market.

Palau proceeds with Ripple to Phase 2 of PSC currency program launchThe Ministry of Finance of Palau has officially initiated the second phase of its Palau Stablecoin (PSC) program, a move aimed at expanding the digital ecosystem and enhancing user engagement.The launch was confirmed by Jay Hunter Anson, a cybersecurity consultant in Palau and adviser to the Ministry of Finance. Taking to the X social media platform on Friday, Anson outlined that “the Republic of Palau Ministry of #Finance seeks to expand accessibility and user participation, reaching a wider audience through educational initiatives.”PSC is a digital currency issued and managed by the Palau Ministry of Finance. It’s pegged to the United States dollar and operates on Ripple’s XRP Ledger. It first emerged that the authorities in Palau were collaborating with Ripple on this project back in July.Photo by Kurt Cotoaga on UnsplashBuilding on phase 1 successIn this next phase, Palau seeks to extend its collaboration with Ripple, leveraging Ripple’s central bank digital currency (CBDC) platform and technical expertise.The Ministry of Finance in Palau had previously announced the success of the first phase of the PSC program earlier this month. This initial three-month phase involved 168 volunteers from government employees who received 100 PSC each to use at local retailers participating in the program. Payments were made through mobile phones by scanning a QR code, and both retailers and volunteers provided positive feedback about their experience with the digital currency.Anson highlighted that the focus of the second phase of the PSC pilot program includes establishing new collaborations for marketing and sustainable development goals. Furthermore, the program prioritizes the development of a digital ecosystem and increased user engagement, with a strong emphasis on regulatory compliance.Anthony Welfare, CBDC Strategic Adviser at Ripple, shared his insights on the launch of the PSC pilot program’s second phase via social media. He underscored the advantages of blockchain-based digital currency, citing reduced transaction fees and the potential to address the environmental impact of money circulation. However, Welfare also acknowledged specific challenges, including the complexity of moving traditional currencies across Palau’s 340 islands and the high mobile data costs in the country.Welfare pointed out a notable feature of PSC, emphasizing that Palau residents can conduct offline transactions using this blockchain-based digital currency, even during power outages.Agile technological adoptionEarlier this month Ripple President Monica Long was featured by the New York Times in an article where she set out expectations for 2024. Long articulated that she believes that “people cannot maintain their faith in a financial system that relies on systems built decades ago to move money.”With the rise of cryptocurrency and blockchain technologies, it’s clear that our financial rails can and will be internet-native, in turn bringing greater accessibility and affordability to financial services for everyone,” Long added.Smaller nations like the Micronesian Republic of Palau have been more nimble in adjusting to the changes that Long refers to. This PSC stablecoin project demonstrates that reality.Palau is not alone. It emerged a few weeks ago that the Solomon Islands had entered into a collaboration with Japanese blockchain technology firm Soramitsu. As part of that project, a CBDC named Bokolo Cash has been unveiled as a proof of concept.